Innovations in Agriculture Helping Ethiopian farmers profit from the sale of white beans Why white beans? White beans have surged in popularity over the past five years, particularly as an export crop to Europe where they are used to make canned baked beans. Beginning in 2005, the market was invigorated by a rapid rise in price, which stimulated farmers and the trading sector. Prices rose by $10/100 kg each year over the next four years due to a combination of factors: • a rise in commodity prices • new entrants to market • internal inflation • the economic crash
Sifting through beans to remove debris. Photo: CRS staff
Ethiopia is one of the world’s largest exporters of white beans. Roughly 70,000 small-scale farmers grow the crop using traditional methods on plot sizes of 0.25-2 hectares (.62-5 acres). Despite the high demand for their produce in Western countries, most Ethiopian farmers are not reaping adequate profits, mainly because they operate in an entirely informal world. No large commercial companies cultivate white beans in Ethiopia.
them to a canning factory in the United Kingdom where they are transformed into baked beans and sold at supermarkets. The diagram below shows the stages of the market chain.
There are several reasons why the farmers aren’t making money. One of the more obvious ones is the high level of inedible content – up to 30% – contained in the bags they sell to buyers. Working along this process is often called “value chain development” because it seeks to help all of the people and companies in the chain to work more effectively together.
Working along the value chain Typical quality
Hand-picked quality
The CRS approach To help farmers maximize the sale of their white bean crop, CRS is working with a a leading Ethiopian export company, Agricultural Commodity Supplies, (ACOS). With CRS support, ACOS buys raw beans from large numbers of local traders and farmer cooperatives, cleans and grades them in a sophisticated processing factory in the Rift valley area of Ethiopia, and then ships
At the farm level, CRS is organizing farmers into marketing groups and providing them with services such as high yielding bean varieties, training in production systems, and improving bean quality for marketing. As part of this project, CRS has supplied nearly 8,000 farmers with more than 400 metric tons of seed over the past three years, an investment that is upgrading the entire production system. At the next few levels, the presence of a strong intermediary like ACOS is key to successfully linking smallholders to modern markets. Thanks to its
For more information on CRS programming, go to www.crsprogramquality.org
affiliation with ACOS, the project benefits from this company’s strong trading relations in Europe, its high standards of quality and efficiency as well as its marketing team, which helps support sales in the United Kingdom. Lastly, to support market demand in the UK, ACOS is working with CRS and the Sustainable Food Lab to promote the use of Ethiopian beans within the UK canning industry. Making this final link is the most challenging part of this market chain, since Ethiopia is trying to break into a new market area. To maintain demand from the smallholder farmers, the Ethiopian beans must compete, season after season, with beans from industrial producers from the USA, Canada and Argentina.
Ethiopian white beans. Photo: CRS staff
For importing companies, it is easier to buy from large commercial farmers, as they have standardized production linked with advanced logistics, information and financial systems. CRS is therefore working with ACOS and the farmers to promote the quality of the Ethiopian beans. Factory tests undertaken in the UK, have shown that Ethiopian beans have excellent factory canning credentials with high processing levels and very competitive pricing. The beans from Ethiopia also bring the dimension of a corporate social responsibility story, since buying from Ethiopian farmers improves the livelihoods of tens of thousands of poor farmers.
Looking ahead Successfully changing how a value chain functions requires careful time and attention, it also requires champions driving this change, investing time and motivation beyond the daily operation of the supply chain. While this requires more upfront investment, the experience from the field suggests these investments are likely to reduce expensive and discouraging future problems that may come from simply trying to incorporate smallholder suppliers into more traditional supply chains and formal markets. The specifics of particular products and value chains structures are very important when moving from principles to developing appropriate supply chain models. The application of new business model principles requires a process of adaptation and co-development undertaken by the chain actors themselves. In working with chain actors to implement these principles, it is important to start from where a firm, its suppliers, and smallholder growers are. It will not be possible to implement all principles from the start. In that sense, the development of new business models is akin to process innovation among business partners. These principles should therefore be considered as a framework to understand and improve an existing supply chain, to develop a new value chain bringing products to market, or to implement new systems such as third party certification.
For more information, go to crsprogramquality.org